Form 42 - Share Issue & Transfer

[BMS]

Hi everyone

Just had an email from the formation agent that I used to set up my Ltd company regarding Form 42 submission.

States the form has to be sumbitted to IR by the 6th July, penalties are £300 and £60 per day for non submission.

They will do it for me for £15 to take away the burden.

My first reaction was...what the f**k is form 42.

My second reaction was... as they are my registered office why the f**k have they not forwarded it to me.

My third reaction... after looking at the form on the Customs & Revenue website and finding that only one section on page 16 applies and a signature is needed was......cheeky bas***ds £15 + VAT for doing nothing, especially as they know that only subscriber shares have been issued on formation.

So, heads up people........

Form 42 probably applies to most Ltd companies with share issue but you can probably fill the form in yourself...don't let a bunch of conmen do it for you.

For further info call Inland Revenue Share Scheme Office on
0207 1472819 or 0207 1472843

and any further info on Form 42, people lets post it to as many forum members as possible ( comments especially welcome from Ozzy )

 

[gj]

Actually £15 to have the form sorted and filed in time - and the hassle taken away is probably money well spent for most business people. You've probably spent more than that in time just finding out about it.

 

[BMS]

Under some circumstances I might agree with you.

However for any companies incoporated in the 2004 - 2005 tax that only have subscriber shares then no.

In this case tey only have to fill in part of section 16 detailing the share allocation at incorporation and sign & date the form and send it off.

As long as there are no reportable events in shareholding / allocation this is a one off event and I damned if it's worth £15 + VAT.

The two things that concern me the most are :

1. My registration agent (who informed me of this via email and wanted to charge me £15 + VAT ) is a subsiduary of a firm of accountants and really they should know better.

2. Having spoken to the Share Sheme section of IR in London this morning, apperently they have not sent these forms out to companies but are relying on individual companies to know about Form 42 and the deadline for it's compulsory filing.

Therefore anyone that doesn't have an accountant doing their books may not know about this.

Chrystal balls or what !!!!!!

 

[Ozzy]

Hi BMS,
I agree with Graham, all businesses are in business to earn a living and the £15 charge is not actually very much. If you break the task down it is made up of;
- Physical handling of the form.
- Signing, dating of the form.
- Posting it back
- Notifying you the form has been filed, probably by posting a copy
- Expertise value, the cost on then knowledge to actually do this.

For example, when people start their own business most actually get their accountant to apply for the VAT registration. Now this is in itself a very straight forward form, but you pay the accountant for their expertise in completing it correctly. Knowledge is money so to speak.

Form42 is a bit of a pig as the IR do expect people to "just know about it", and Mike from SFS has some good information on his website about it - which I'm afraid I haven't had time to get around to doing myself yet. To promote the competition for a moment you can read more on Mike's website here Form 42

(There you go Mike I even keyworded the link for you )

 

[MikeH]

Just to muddy the water a little this legislation is an absolute joke. The IR have no requirement to advise companies of their obligation to file this form. To date I do not know of one single company that has received a form 42 or been advised of it. However, as discussed above there are hefty penalties for failure to submit the form.

Fear not though. If you follow the link that Richard so kindly created in his post you will find some helpful information. In addition you will find a link to an abbreviated version of From 42. This is suitable for any company that has simply had subscriber shares issued or purchased a shelf company. We have submitted some of these for clients, submitted them and heard nothing from the IR. It is a case of biting off more than they can chew.

Just consider how many companies are formed each year, how many shares change hands and how many companies modify their share capital.

I have to agree that paying someone to complete form 42 is a bit of a con especially when you could use the abbreviated form.

One additional point. I have not heard of one single company that has been fined for failure to submit this form.

Mike.

 

[Alpha]

BMS

Just to add my view, whilst you are correct that the Inland Revenue have not made it widely known it is probably expected (and no offence meant to many sole traders and partnerships) that companies operate with a higher required level of professional knowledge and that is why they pay professional advisors.

It is often the case that we as professional advisors in our field do not know everything but we do know 'which book to find it in' and we are paid for our professional knowledge and ability in the same way that you are paid for your professional ability in payroll and book keeping. (I have said in the past on these forums that good book keepers are worth paying for as they mean that we as accountants do not have to sort out the mess at substantial costs afterwards). What would be your reaction if someone retorted to you that they think you are a robbing so and so for charging £x as its something that they could do so simply (after all its just writing down figures isnt it???).

Finally you have a very simple option find out and do it yourself or pay someone else to do it. I personally include it in my charges to clients to set the company up so they do pay me for it but it isnt itemised. If your formation company had done the same you probably would not have argued but at least they have been very upfront about it.

 

[BMS]

Hi Alpha

You are of course, right in what you say.

Professional accountants do have a higher level of understanding and legislative knowledge, and please rest assured that I was not speaking generally in my decription of the scenario that I found my company in.

My point was that as my formation company is a subsiduary of a firm of accountants, then surely the method of informing me that Form 42 should be submitted by the 6th July ( says 7th on the Customs & Revenue website ) and emphasising the fact that we would incur a fine of £300 and £60 per day costs for late filing, also implying that the form is very complicated and it is 16 pages long and it might be prudent to have them submit the form on my behalf for £15 + VAT.. all of this me a global email to all of their customers......has a hint of taking the piss.

I would expect a firm of qualified accountants to come up with a slightly more refined marketing ploy than this, easpecially as it appears to be relying of firms panicking at the thought of these fine (not all businesses have accountants as they do the bookkeeping themselves ) and may not have even questioned the charge.

I wouldn't have minded but they did not even bother to explain what the form related to.........

It might be interesting to set up a poll to find out how many people are aware of Form 42.

That having been said you are right ignorance is no defence.

I shall make sure that I contact you at financial year end for a competitive quote ........

Thanks Alpha.

 

[Alpha]

also implying that the form is very complicated and it is 16 pages long and it might be prudent to have them submit the form on my behalf for £15 + VAT.. all of this me a global email to all of their customers......has a hint of taking the piss.

You did omit this bit in your original post!!!

In this case and 'preying' on peoples fears especially when it is them that initiate it is 'Taking the p*ss'

I cannot disagree with mike though that this form is pointless bureaucracy especially when we already have to inform them of a business starting up on form CT41G. They could simply add the required details for new company formations to this. They already get details of share sales via the stamp duty section, which only leaves transfer of shares at nil value which can be obtained from companies house in the same way that they find out about new company formations!!

And to be honest most accountants don't want to add this to all the other stupid regulations!!

 

[BMS]

Sorry Alpha,

You know what it's like when you go into rant mode, sometimes you omit certain salient facts.